Can Raising Minimum Teacher Salaries Reduce Teacher Turnover?
Zamarro et al. (2026) examined whether raising minimum teacher salaries improves teacher retention. They analyzed Arkansas’s 2023 education reform, which increased minimum annual teacher salaries from $36,000 to $50,000. Using statewide salary schedules and administrative employment records covering approximately 31,500 teachers annually, they examined retention over three years following the reform. They found that teachers receiving raises exceeding $6,000 were substantially more likely to remain in their districts, while smaller increases produced weaker effects. Rural and high-poverty districts experienced particularly large salary increases. However, the researchers found evidence that retention improvements may diminish as inflation reduces the purchasing power of higher salaries.
Why This Article Was Selected for The Policy Scientist
Teacher compensation remains a central issue in education policy because salaries influence recruitment, retention, and the distribution of experienced teachers across schools. Persistent teacher shortages, particularly in rural communities and districts serving disadvantaged students, have increased interest in whether higher salaries can stabilize the teaching workforce. This question is especially timely as states consider substantial increases in minimum teacher pay while confronting budgetary constraints and rising employment costs. Teacher turnover also imposes costs on school districts through recruitment, hiring, and training, while potentially disrupting instructional continuity.
The study contributes to a substantial literature examining the relationship between teacher compensation and workforce stability. Earlier research, including Hendricks (2014), established that higher salaries can reduce teacher turnover. However, evidence concerning large, statewide increases in minimum salaries remains relatively limited. This study extends that literature by examining how the magnitude of salary increases influences retention and whether the benefits persist over time. Published in Education Finance and Policy, a respected peer-reviewed journal specializing in the economics and financing of education, the research addresses questions relevant to state education policy.
The dataset is particularly strong, combining salary schedules from nearly every Arkansas public school district with longitudinal administrative employment records covering approximately 31,500 teachers annually. The researchers employ a triple-difference design, a credible causal inference approach that exploits differences in salary increases across teachers and districts. Although not equivalent to random assignment, this method provides stronger evidence of causation than conventional multivariate regression, subject to its identifying assumptions. The findings are potentially applicable to other states considering substantial minimum salary increases, although differences in labor markets, existing compensation levels, and school funding systems may influence the magnitude and durability of retention effects.
Full Citation and Link to Article
Zamarro, G., Camp, A. M., McGee, J. B., Wilson, T., & Vernon, M. (2026). Raising the floor: Teacher retention effects of a statewide minimum salary increase. Education Finance and Policy. Advance online publication.
Central Research Question
Does raising minimum teacher salaries improve teacher retention, and does the magnitude of salary increases influence whether teachers remain in their school districts? The research examines Arkansas’s LEARNS Act, a major education reform implemented during the 2023–24 school year that increased the statewide minimum teacher salary from $36,000 to $50,000 and guaranteed every teacher an annual raise of at least $2,000.
The study addresses three related questions. First, how did school districts modify their compensation structures in response to the legislation? Second, how did the reform affect salary differences across districts, particularly those serving rural communities and students from lower-income households? Third, did teachers receiving larger salary increases become more likely to remain employed in their districts?
The central distinction is between increasing salaries generally and providing sufficiently large increases to influence employment decisions. Because the legislation produced different salary increases depending on teachers’ previous compensation, experience, and districts, it created an opportunity to estimate how retention responds to the size of a salary increase.
Previous Literature
Previous research generally indicates that higher teacher salaries improve retention, although the magnitude and persistence of these effects vary considerably.
Hendricks (2014), using administrative data from Texas, found that higher base salaries reduced teacher turnover, particularly among teachers early in their careers. His research also suggested that flatter salary schedules could improve retention by directing more compensation toward relatively inexperienced teachers.
Sun et al. (2025) examined legislatively induced teacher salary increases in Washington State. They found reductions in turnover among midcareer and experienced teachers during the first year following implementation, although improvements in teacher recruitment were limited.
Nguyen, Anglum, and Crouch (2023) investigated the relationship between school finance reforms and teacher retention. Their findings suggested that meaningful improvements in retention required substantial, sustained funding increases, with effects developing over several years. Similarly, Nguyen et al. (2020), in a meta-analysis, documented a generally positive but modest relationship between teacher compensation and retention.
A related literature examines how salary schedules distribute compensation across teachers. Ballou and Podgursky (1997), Podgursky and Springer (2007), and Hanushek (2007) questioned whether traditional salary schedules adequately reflect differences in teacher effectiveness, labor market conditions, and staffing needs.
The present study extends these research traditions by examining a large statewide minimum salary increase that disproportionately benefited early-career teachers and employees in historically lower-paying districts.
Data
The researchers assembled an extensive dataset combining school district salary schedules with statewide administrative employment records.
Salary schedules were collected for the 2022–23 school year, immediately preceding implementation, and the 2023–24 school year, when the new minimum salary requirements took effect. Additional salary schedules provided information about subsequent district adjustments.
These records identified compensation associated with different combinations of teaching experience and educational credentials. Linking the schedules to individual employment records allowed the researchers to estimate the salary increases teachers were expected to receive under the legislation.
The administrative data covered Arkansas public school teachers from 2014–15 through 2025–26, including the first three years of the reform. This extended observation period enabled comparisons of employment patterns before and after implementation.
Employment outcomes included remaining in the same district, transferring to another district, moving into noninstructional positions, retiring, and leaving Arkansas public education.
The analysis also incorporated district characteristics, including geographic location and the proportion of students eligible for free or reduced-price meals, to examine how compensation changes differed across communities.
Because the administrative records covered the statewide public school teaching workforce rather than a small voluntary survey, the dataset substantially reduced concerns about sampling bias and provided detailed employment histories.
Methods
The researchers employed a triple-difference-in-differences design to estimate the effects of legislatively mandated salary increases on teacher retention.
This quasi-experimental approach exploited differences in the salary increases teachers received because of their positions on existing district compensation schedules. Teachers whose previous salaries were substantially below the new minimum experienced larger increases than teachers already earning relatively high salaries.
The analysis compared changes in retention across salary categories within districts, accounting for statewide employment trends and differences between districts affected to varying degrees by the legislation.
The researchers estimated treatment effects using continuous salary increases, an indicator identifying raises exceeding $2,000, and separate categories of salary increases. The categorical analysis allowed them to determine whether larger raises produced disproportionately greater improvements in retention.
Their models also incorporated fixed effects to account for persistent differences across districts and compensation categories. Event-study analyses examined whether employment trends differed systematically before implementation and whether estimated effects changed over time.
The validity of the causal estimates depends on the assumption that, without the legislation, employment outcomes across the relevant salary categories would have followed comparable trends. The absence of statistically significant pre-reform differences provides some support for this assumption, although it cannot establish it conclusively.
Additional analyses examined within-district transfers and adjustments for geographic differences in living costs.
Findings/Size Effects
The legislation substantially changed teacher compensation across Arkansas, particularly for early-career teachers and employees in historically lower-paying districts.
Before implementation, the statewide minimum salary was $36,000. The legislation raised this threshold to $50,000, representing a 38.9% increase.
Districts generally made only the adjustments required to comply with the legislation.
Among districts' salary schedules for teachers holding bachelor's degrees, 55% adopted essentially flat schedules paying $50,000 regardless of experience. Another 36% increased salaries below the new minimum while providing required raises to teachers already earning more. The remaining 9% generally increased existing salaries by $2,000.
Consequently, 86% of districts paid teachers with five years of experience the $50,000 minimum. The corresponding figures were 76% for teachers with ten years of experience and 65% for teachers with fifteen years.
Salary differences across districts also narrowed considerably. Before the reform, starting salaries in rural districts were approximately $2,075 lower than in comparable urban districts. After implementation, this difference declined to approximately $258.
The relationship between district poverty and teacher compensation weakened substantially. Before implementation, a ten-percentage-point increase in the proportion of students eligible for free or reduced-price meals was associated with approximately $487 lower starting salaries. Following implementation, this relationship was no longer statistically significant.
The average teacher received an estimated raise of $4,234, while the median increase was $2,000. Among teachers receiving raises exceeding the required $2,000 minimum, the average increase was approximately $7,000.
The principal finding concerns teacher retention. Teachers receiving raises above $2,000 experienced an estimated two-percentage-point increase in their probability of remaining in the same district.
The estimated relationship was approximately 0.4 percentage points of additional retention for every $1,000 salary increase above the minimum.
However, effects varied considerably with the size of the raise. Increases of $2,001–$4,000 produced no statistically significant retention improvement. Raises of $4,001–$6,000 increased retention by approximately 1.4 percentage points. Increases of $6,001–$8,000 raised retention by 2.2 percentage points, while raises exceeding $8,000 increased retention by 3.1 percentage points.
Larger increases also reduced teacher departures. On average, raises above the minimum reduced exits from Arkansas public education by approximately 0.9 percentage points and retirements by 0.7 percentage points.
For teachers receiving raises exceeding $8,000, estimated reductions in exits, transfers to other districts, and retirements were 1.5, 1.4, and 0.9 percentage points, respectively.
The researchers found no statistically significant effects on transitions into noninstructional positions.
Although retention improved during the initial implementation period, the estimated effects appeared to weaken in subsequent years. This pattern is consistent with the possibility that inflation gradually reduced the real value of the initial salary increases.
Conclusion
The findings indicate that substantial increases in minimum teacher salaries can improve teacher retention, particularly when compensation gains are large enough to influence employment decisions.
Arkansas’s reform also substantially reduced geographic differences in starting salaries, especially between rural and urban districts. However, salary differences associated with experience and district characteristics persisted.
The results suggest that the magnitude of compensation increases matters considerably. Smaller raises produced limited measurable improvements, while increases exceeding $6,000 generated more substantial retention effects.
The study provides evidence that statewide salary policies can influence teacher employment decisions while changing the distribution of compensation across school districts. Nevertheless, the apparent weakening of retention effects over time raises questions about whether initial improvements can be sustained without additional salary adjustments.
Because the analysis concerns a single state and a relatively short post-reform period, further research is necessary to determine whether comparable effects occur in other labor markets and whether improved retention persists over longer periods.
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